Avoid an Identity Crisis
It's happened to millions of us-3.3
million of us in the past year, according to the Federal Trade
Commission. Our identities are being stolen, remarketed, then
exploited to our detriment. Fraudulent bank accounts are opened
in our names, credit card accounts are created without our knowledge.
and bills are being run up that are ruining our credit. It's identity
theft, and it is on the rise in America, spreading faster everyday.
And it is not only putting our personal lives at risk; as providers
of credit handling sensitive borrower information, the identity
theft epidemic is also endangering our business lives. It could
prove useful to examine ways in which we are exposed, both personally
and professionally, and look into ways to protect ourselves.
Identity theft has been described
as "the perfect Internet crime." While the Internet
has made identity theft perpetration even easier than it has been
in the past, the Web is by no means the only way it happens. Restaurants,
retail stores, mail-order houses, and other places where financial
information changes hands are all potential identity theft venues.
The Internet has made it all easier, however. Credit card numbers
are stored in so many places, thanks to the convenience of e-commerce.
The credit card companies have responded with tighter security
measures than ever before, using automated systems to track customer
spending profiles. If you are traveling, for example, and spending
money in places you don't normally, expect a call from your card's
security department. Of course, if you really are the one spending,
you probably won't be home to receive the call, and you may find
your card suddenly voided. A hassle, but in the long run, it's
a good thing.
Credit card companies are on the
hook for big money in identity theft cases. In a recent example,
an American Express cardholder was called at his home by AMEX
Security and asked whether he had been purchasing a lot of computer
equipment over the Internet. No, replied the cardholder. The security
official sighed and noted that AMEX had approved the first charge
of $2,000 before the system set off an alarm, denying a dozen
other purchases. The equipment, presumably shipped to a mailbox
location overnight, is gone, leaving AMEX holding the bag. They
changed the cardholder's account number (which had been unchanged
for 25 years) and overnighted him a new card. To avoid an interruption
in service when traveling, they advised, give them a call first
so they would expect some charges from locations far from home.
So, phone calls, the system expense, the $2,000 charge, the courier
charge on the new card, all on one little case. How much would
millions of cases like this one cost American business?
Armed with a purloined Social Security
Number, identity thieves can make all manner of mischief. They
have opened credit lines, rented apartments, purchased automobiles,
and run up horrendous amounts of debt, all without the victim's
knowledge. In one celebrated case, a piece of real property was
sold without the victim's knowledge. Even though victims' financial
obligations for most of these thefts are minimal, the effect on
credit is devastating and can take years to repair. To attorneys,
this means liability, and someone at fault can very often be found-usually
the entity from whom the victim's information was stolen.
As to protecting your own identity
from theft, advice is available from no less of an authority than
Frank Abagnale, a leading expert on these types of crimes, having
once perpetrated them himself. Abagnale was the subject of the
2002 film, "Catch Me If You Can." Among the items he
specifies in a recent article on Bankrate.com:
- Guard your SSN.
It is the key for all your accounts and is the prime target
of criminals
- Monitor your credit
report. It has everything an identity thief needs to
raid your accounts and play havoc with your life.
- Shred all old
bank and credit card statements. This includes junk mail
pre-approved credit card offers. Purists would use a "crosscut"
shredder rather than a regular model.
- Request that the
three credit reporting bureaus remove your name from marketing
lists. This will reduce the number of offers you receive.
- Add your name
to name-deletion lists. The Direct Marketing Association's
Mail Preference Service and Telephone Preference Service are
used by banks and other marketers. Go to www.the-dma.org
for instructions. Click on the "For Consumers" button.
It's $S to do it online and free if done by mail.
- Copy the contents
of your wallet and don't carry more than you need. You'll
have your account numbers and expiration dates handy when you
need them, and if your wallet is stolen, you might slow the
thieves down a bit.
- Don't print your
SSN on your checks. Don't mail bills from home. The SSN
part is now hopefully obvious. Your bills can be stolen from
your mailbox and used by thieves. It's safer to drop them in
a USPS box.
- Examine your
credit card bills before paying them, and cancel unused accounts.
Some charges can sneak right by you without being noticed; thieves
aren't on1y interested in the big hits.
It's an identity crisis, all right. Thieves
have gotten so good, and spending money on the Internet is so
easy, that all of us are at risk for identity theft. Protect yourself
from the criminals and protect your business from liability. An
ounce of prevention here can be worth more than the proverbial
"pound of cure."
